The UK’s transition to renewable energy and low-carbon technologies could protect households and businesses from volatile global fossil fuel markets while costing far less than critics claim, according to analysis from the Climate Change Committee.

The climate advisers estimate that reaching net zero emissions by 2050 would require about £4 billion a year, or roughly £100 billion over the next few decades.

The figure is comparable to the economic impact of fossil fuel shocks, including the surge in energy prices following Russia’s invasion of Ukraine in 2022.

The findings come as global energy markets face renewed turbulence linked to the Iran war.

Oil prices briefly climbed above $100 a barrel earlier this week as disruptions in the Middle East tightened supply.

Net zero costs debate

The Climate Change Committee said its analysis challenges claims that the UK’s net zero target would impose a major financial burden.

Some right-wing think tanks and populist politicians, including the Reform Party, have argued that reaching net zero could cost the economy as much as £9 trillion.

The CCC report disputes those estimates, saying they fail to account for the cost of continuing to buy fossil fuels if emissions targets are not met.

According to the committee, the transition to renewable power, electric vehicles, and heat pumps represents the most cost-effective pathway for the UK economy.

The findings were published on Wednesday in a report supporting the committee’s advice to ministers on the country’s seventh carbon budget.

Oil market shocks

The report was released as energy markets face renewed geopolitical pressure.

Oil prices rose above $120 a barrel on Monday after some production sites in the Middle East halted operations, and tanker traffic through the Strait of Hormuz was disrupted.

Although prices later eased slightly, supply constraints continue to affect global markets.

This marks the second major oil price shock in four years.

The earlier surge followed Russia’s invasion of Ukraine in 2022, which sent gas and oil prices sharply higher across Europe.

Economic and health gains

The CCC analysis suggests the shift away from fossil fuels could bring broader economic benefits beyond energy security.

Renewable energy systems are generally more efficient than fossil fuels and less vulnerable to supply disruptions caused by international conflicts or political tensions.

Cleaner energy could also lead to warmer homes, reduced air pollution, and increased active travel.

Changes in diet, including lower consumption of red meat, could contribute to improved public health.

The committee estimates that these combined benefits could generate annual savings of between £2 billion and £8 billion for the NHS and individuals.

Policy and political tensions

The UK is legally required to reach net zero greenhouse gas emissions by 2050.

At that point, emissions would be balanced by carbon absorption from forests, land, and carbon capture technologies.

However, the policy remains politically contested. Both the Conservative Party and Reform have pledged to scrap the net zero target.

Reform has also proposed removing incentives encouraging households to switch to heat pumps.

The government is expected to publish its response later this year to the CCC’s recommendations on the seventh carbon budget covering the period from 2038 to 2042.

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China’s government agencies and state-owned enterprises have begun warning staff against installing the artificial intelligence agent OpenClaw on office devices, citing potential security concerns.

The guidance, as reported by Reuters, highlights caution inside the Chinese state sector over emerging autonomous AI tools.

OpenClaw is an open-source system capable of independently performing complex digital tasks with limited human guidance.

The tool has gained traction among Chinese developers, AI companies, and several local governments during the past month.

Regulators and state media have warned that once installed and granted system permissions, the software could leak, delete, or misuse sensitive data stored on devices.

The warnings show the balance Beijing is attempting to maintain as it promotes artificial intelligence adoption through its national “AI plus” strategy while guarding against cyber and data risks.

AI agent security concerns

The concerns centre on OpenClaw’s ability to autonomously carry out actions on a computer once given access rights.

Unlike conventional AI chatbots that mainly generate text or answer questions, AI agents like OpenClaw can execute tasks automatically.

These may include interacting with files, launching programs, or navigating online services without direct supervision.

As per the report, Chinese regulators have signalled that such capabilities could create security vulnerabilities if used within government or enterprise systems.

Officials and state media have warned that AI agents with elevated permissions may expose confidential information or interfere with sensitive digital infrastructure.

Staff working at state entities have therefore been advised to avoid installing the software on work computers.

Warnings to state workers

As per the report, regulators instructed employees at several state-owned enterprises not to deploy OpenClaw.

In some cases, staff were also discouraged from installing the software on personal devices used for work-related activities.

Another source cited by the report, said OpenClaw had not been formally banned within their organisation.

However, employees were warned about safety risks and advised not to install it.

It remains unclear how widely the restrictions have been implemented across government bodies and state companies.

Local government support grows

Despite the warnings from regulators, OpenClaw has been promoted across China’s technology ecosystem during the past month.

Developers, AI firms, and several local governments have encouraged experimentation with the software.

Some regional authorities have offered million-dollar subsidies to companies developing applications based on OpenClaw.

These incentives are framed as part of local implementation of Beijing’s broader “AI plus” action plan to integrate artificial intelligence across the economy.

The push has extended into healthcare. Last week, a research centre under Shenzhen’s municipal health commission hosted a training event focused on OpenClaw.

Thousands attended the session as part of the city’s effort to accelerate AI adoption in medical services.

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Oil majors are in the spotlight as the effective closure of the Strait of Hormuz forces traders to reprice supply risk, sending benchmark crude sharply higher and pushing selected energy stocks toward fresh highs.

With tankers avoiding one of the world’s most vital chokepoints and maritime traffic reportedly down about 80%, investors are rotating into integrated producers and refiners seen as winners from any prolonged disruption.

Hormuz risk reprices oil

Iran’s move to block oil and gas exports through the Strait has choked off flows on a route that normally carries roughly a fifth of global crude shipments.

Analysts warn that any damage to regional energy infrastructure could push prices much over 100 dollars, with pressure already visible in European and Asian gas benchmarks that rely heavily on imported LNG.

Against that backdrop, large, liquid US energy names with diversified upstream portfolios and strong balance sheets have become defensive havens.

Investors are also snapping up refiners that benefit from wider crack spreads as crude rises and product markets tighten.

ExxonMobil: Scale and cash flow in focus

ExxonMobil shares have been climbing alongside crude, trading in the high‑140s to low‑150s in recent sessions, with a close around 148–150 dollars this week based on US and UK price data.

Over the last 12 months, the stock has gained about 35%, outpacing the broader market as the company leans on lower‑cost production growth from Guyana and the Permian Basin to support buybacks and dividends.

Macro models still pencil in a modest pullback over the next year, reflecting some skepticism over how long today’s geopolitical premium in oil can last, but the stock remains near its recent 13‑month highs.

For investors, the appeal is a combination of scale and resilience.

Exxon’s integrated model offers some hedge if crude retreats, while any move toward sustained 90–100‑dollar Brent would likely feed directly into earnings and free‑cash‑flow upgrades.

That helps explain why the stock now trades on richer valuation metrics than much of the sector: investors are willing to pay up for balance sheet strength and visible project pipelines when supply risk is being repriced almost daily.

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Chevron: Geopolitical fear premium at work

Chevron has been one of the most visible equity winners from the Hormuz shock.

The stock recently hit an all‑time high of about 190.75 dollars, with gains of roughly 12% over the past four weeks and just over 20% in the last 12 months as investors crowd into the name.

Data shows shares pushing through a series of multi‑year highs through February, underlining how energy has diverged from a more volatile broader equity tape.

News flow around the conflict has effectively added a “geopolitical fear premium” to Chevron’s already improving fundamentals.

The company’s exposure to US shale and offshore projects, coupled with a strong capital‑return program, means higher crude prices flow quickly into free cash flow and buybacks.

While that has nudged valuation multiples above some peers, bulls argue that in a world of constrained supply and heightened Middle East risk, large integrated names like Chevron are precisely the assets global investors want to own.

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Valero: Refining torque to tight supply

Refiners are also riding the wave. Valero Energy has rallied hard as traders anticipate wider refining margins in a world of scarcer, more expensive crude and altered product flows.

Recent commentary highlights the stock’s outperformance as Middle East tensions reprice diesel and gasoline cracks, with investors using Valero as a high‑beta way to express tighter global product markets.

The investment case is more cyclical than for the integrated majors. Valero’s earnings are acutely sensitive to crack spreads, which can expand when crude rises faster than refined product demand or when disruptions force long‑haul rerouting of supplies.

At the same time, policy uncertainty around low‑carbon fuels and future refinery closures remains a medium‑term overhang, meaning the current rally is more tightly tied to how long the Hormuz crisis persists.

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What investors are watching next?

The path for these stocks now hinges on how the conflict evolves.

Analysts note that a brief disruption with limited infrastructure damage could see some of the risk premium bleed out of crude and compress valuations at the margin.

A more prolonged closure of Hormuz, or successful attacks on regional export facilities, would likely push oil significantly higher and reinforce the bid for integrated majors and refiners alike.

For now, the trade is straightforward: as long as tankers remain reluctant to transit the Strait and policymakers warn of “exceedingly high” risks to energy infrastructure, large‑cap oil and refining names such as ExxonMobil, Chevron and Valero are set to stay at the center of the market’s attempt to hedge a potential supply crisis.

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Saudi Arabia’s Aramco, the world’s largest oil exporter, announced its first-ever share buyback plan of up to $3 billion, even as the company reported a 12% drop in annual profit in 2025, primarily attributed to lower crude prices.

The company previously rewarded shareholders primarily through substantial dividend payouts.

However, a buyback program is now slated to be conducted over the next 18 months, according to an official press release.

The company posted a net income of $93.4 billion for 2025 compared to $106.2 billion in the previous year. 

Earnings results and dividends

Net profit for the fourth quarter fell 20.5% to almost $17.8 billion due to increased operating costs.

This marks the 12th consecutive quarter of a year-on-year profit decline.

Aramco approved a base dividend payment of $21.89 billion for the fourth quarter, a 3.5% year-on-year increase.

It also paid $219 million in performance-linked dividends. 

As a vital source of income for the Saudi state, the company remains one of the world’s largest dividend payers.

Despite a drop in crude prices in 2025, the company prioritised payouts, with total shareholder distributions for the year reaching $85.5 billion.

This mechanism for performance-linked dividends was introduced after the significant profits in 2022, following the Ukraine war, and is calculated based on free cash flow.

“This enabled a 3.5% increase to our base dividend, reinforcing our focus on delivering sustainable and progressive shareholder returns,” Aramco President and Chief Executive Officer Amin H. Nasser said. 

Meanwhile, despite a year marked by oil-price volatility, the Saudi state oil giant announced a full-year adjusted net income of $104.7 billion, characterising the result as “robust growth.”

Aramco’s performance in 2025 reflected a decline, largely driven by weaker prices for crude oil, refined products, and chemicals. 

Total revenue fell 7.2% to $415.8 billion. Consequently, the total dividends paid for the year were $85.5 billion, a decrease from $124 billion in 2024.

Despite the drop in revenue, the company’s gearing ratio, a measure of indebtedness, improved, falling to 3.8% at the end of 2025 from 4.5% at the end of 2024.

As a significant contributor to the Saudi economy, Aramco remains a crucial source of government revenue, providing over half of the state’s income, which is heavily reliant on fossil fuels. 

The Saudi state maintains substantial ownership, directly holding nearly 81.5% of the company, with its sovereign investor, the Public Investment Fund, holding an additional 16%.

Aramco’s balance sheet

Aramco’s operating cash flow reached $136.2 billion last year, a result the company attributed to consistent production and robust performance in its downstream business. 

The total capital investments for the year amounted to $52.2 billion. This figure aligned with the company’s guidance and represented a slight decrease compared to 2024 investment levels.

“Our disciplined capital allocation, combined with lower‑cost and highly reliable operations, drove strong financial performance in a year marked by price volatility,” Nasser said in the earnings release.

Global crude oil prices softened in 2025, dropping to $69.2 per barrel from $80.2 in 2024, a change driven by an increase in global supply. 

However, recent escalations in the Middle East conflict have caused a sharp spike, pushing crude prices to nearly $120 per barrel.

Catastrophic consequence for oil markets

The CEO of Saudi oil giant Aramco, Amin Nasser, has warned that the Iran war poses a risk of “catastrophic consequences” for the global oil market. 

Speaking on an earnings call on Tuesday, Nasser stated that the conflict has triggered “a severe chain reaction” and “a drastic domino effect.” 

He emphasised that the impact extends beyond shipping, affecting sectors such as aviation, agriculture, and the automotive industry.

“There will be catastrophic consequences for the world’s oil market. The longer the disruption goes on and the more drastic the consequences for the global economy,” he said. 

He added that it is one of the biggest threats so far for the oil and gas industry.

Last week, Aramco’s Ras Tanura refinery was struck by a projectile.

This incident occurred amidst widespread drone and missile attacks launched by Iran against Gulf states, which Iran claimed were in response to US and Israeli strikes against it.

Supply fears initially caused oil prices to surge.

However, prices dropped after US President Donald Trump warned that the US would retaliate “twenty times harder” should Iran attempt to stop the flow of oil through the Strait of Hormuz.

Also, bringing relief to the oil market was Trump’s comments that the war would be over soon. 

At the time of writing, the price of West Texas Intermediate crude was at $87.56 per barrel, down 7.6%, while Brent was 7.7% lower at $91.38 a barrel. 

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Billionaire investor Bill Ackman has taken a step toward listing his investment platform on public markets, filing for an initial public offering that would bring his hedge fund alongside a new closed-end investment vehicle to a US exchange.

The filing outlines a combined offering involving Pershing Square Capital Management and a newly created closed-end fund, Pershing Square USA Ltd.

The structure would allow investors to gain exposure to both Ackman’s investment management business and the capital deployed through the fund.

The planned listing forms part of Ackman’s long-standing ambition to build a permanent investment vehicle modeled on the approach used by Warren Buffett and Berkshire Hathaway.

Dual-listing structure for hedge fund and investment vehicle

Under the proposal, Pershing Square plans to list on the New York Stock Exchange under the ticker symbol “PS.”

The transaction would involve a dual structure in which Pershing Square’s common shares and the shares of its investment vehicle will both trade on the NYSE.

The securities will be listed at the same time but trade independently, allowing investors to buy or sell each separately.

The filing shows that for every 100 shares purchased in the closed-end fund offering, investors will receive 20 shares in Pershing Square Capital Management.

The arrangement would give investors ownership exposure to both the investment manager and the fund that deploys its capital.

The firm noted that there has previously been no public market for Pershing Square’s common stock before the proposed combined offering.

IPO targets up to $10 billion in new capital

Ackman is seeking to raise between $5 billion and $10 billion through the offering, with shares expected to be priced at $50 each.

The filing indicates that the deal has already secured $2.8 billion in commitments from qualified investors including family offices, pension funds, and insurance companies.

Investors participating in the private placement component of the offering will receive 30 shares in the hedge fund for every 100 shares of the closed-end fund they purchase.

The combined offering is being led by several major investment banks, including Citigroup, UBS, Bank of America, Jefferies Financial Group and Wells Fargo.

Ackman’s long-term strategy inspired by Buffett

The proposed listing marks the latest stage in Ackman’s effort to reshape Pershing Square into a permanent-capital investment platform similar to Berkshire Hathaway.

Ackman has frequently described himself as a “Buffett devotee,” saying the 93-year-old investment icon has been his “unofficial mentor” for years and noting that he regularly attends Berkshire Hathaway’s annual shareholder meetings in Omaha.

The Pershing Square founder has often pointed to Buffett’s early career managing private investment partnerships before transforming Berkshire Hathaway into a long-term compounding investment vehicle.

“Permanent capital allows us to take a long-term view and be opportunistic during periods of market volatility, without being exposed to the need to raise capital by selling assets to meet redemptions during such periods,” the filing said.

The IPO also comes after earlier attempts to create a similar vehicle.

In 2024, Pershing Square planned to raise as much as $25 billion for a New York Stock Exchange-listed closed-end fund, but the effort ultimately did not proceed.

That same year, Ackman sold a 10% stake in Pershing Square in a private transaction that valued the firm at more than $10 billion ahead of the proposed public listing.

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US stock index futures were in green on Tuesday as oil prices declined and investors reacted to signs that the conflict involving Iran could be nearing an end.

The rebound followed remarks from US President Donald Trump suggesting the military campaign was progressing faster than expected, easing some concerns about prolonged disruptions to global energy supplies.

Futures tied to the Dow Jones Industrial Average gained around 17 points, or about 0.03%, while S&P 500 futures rose 0.02%.

Nasdaq 100 futures added roughly 0.07% as investors cautiously returned to risk assets.

The market’s direction remained closely tied to developments in energy markets after oil prices had surged sharply in recent sessions amid fears that the Middle East conflict could disrupt global supply.

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Oil prices fall after Trump comments on Iran conflict

Oil prices declined on Tuesday after a volatile session the previous day.

West Texas Intermediate crude futures fell about 6.8% to around $88.43 per barrel, while Brent crude dropped 7.5% to roughly $91.5 per barrel.

Prices had previously surged close to $120 per barrel as concerns grew about disruptions to shipments through the Strait of Hormuz, a key route for global energy flows.

The pullback followed comments from President Trump indicating that the conflict may end sooner than initially expected.

“We’re achieving major strides toward completing our military objective,” Trump said, reinforcing earlier comments that the military campaign could soon conclude.

Speaking at a press conference, the president also emphasized the importance of maintaining energy supply.

“We are also focused on keeping energy and oil flowing to the world.”

Markets had already rallied late Monday after Trump told CBS News that “the war is very complete, pretty much.”

The president also said the United States was “very far” ahead of his previously stated timeline of four to five weeks for the conflict.

Investors watch energy markets and inflation risks

Despite the rebound in equities, uncertainty about energy markets continues to shape investor sentiment.

Iran has said it will continue its oil blockade in the region, while energy producers across the Middle East have yet to fully resume production. Shipping costs are also expected to remain elevated for some time.

The Group of Seven energy ministers is scheduled to meet virtually to discuss the possibility of releasing strategic oil reserves to stabilize markets.

International Energy Agency Executive Director Fatih Birol said the conflict was “creating significant and growing risks for the market,” while noting that options including the release of emergency oil stocks had been discussed.

Experts warned that oil markets remain sensitive to further disruptions.

Amin Nasser, chief executive of Saudi oil giant Aramco, also warned that the conflict could have “catastrophic consequences for the world’s oil market.”

Travel stocks rebound while energy shares fall

Lower oil prices helped support sectors that had been under pressure from rising fuel costs.

Airline stocks including American Airlines and Delta Air Lines gained in premarket trading.

Energy companies, however, declined as crude prices fell.

Shares of Occidental Petroleum dropped around 3.4%, while Exxon Mobil and ConocoPhillips traded slightly lower.

Technology stocks continued to show resilience, helping limit broader market losses during the recent volatility.

Nvidia fell about 0.2%, while storage companies SanDisk and Western Digital rose around 1%.

Elsewhere, Hewlett Packard Enterprise gained after forecasting second-quarter revenue above expectations.

Enterprise software company Oracle also gained around 1% ahead of results due after the market close.

Cryptocurrency-related stocks moved higher as well.

Strategy and Coinbase each rose about 2%, tracking a roughly 4% rise in Bitcoin.

Market participants will now focus on upcoming inflation data later this week, which may offer further clues about the Federal Reserve’s policy path as energy price volatility continues to influence the economic outlook.

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The global race to build artificial intelligence infrastructure is intensifying as demand for computing power grows across industries.

AI data centre startup Nscale said on Monday it has raised $2 billion in fresh funding at a $14.6 billion valuation, underscoring investor confidence in companies building the backbone of the AI economy.

The Series C round included major technology firms, financial institutions, and chip giant Nvidia, reflecting growing interest in the infrastructure needed to power advanced AI models.

The new funding will support Nscale’s effort to expand its integrated AI computing platform across Europe, North America, and Asia.

Funding round

The Series C round was led by Aker ASA and 8090 Industries and included participation from Nvidia.

The financing also drew backing from Astra Capital Management, Citadel, Dell, Jane Street, Lenovo, Linden Advisors, Nokia, and Point72.

The mix of investors highlights the wide interest in AI infrastructure as companies build the systems required to support increasingly complex artificial intelligence models.

Large technology groups and financial investors have been pouring capital into the sector as demand for computing capacity continues to expand.

Nscale said the latest funding will accelerate the development of its vertically integrated AI infrastructure platform.

The company is focused on combining GPU computing, networking systems, data services, and orchestration software within a single technology stack designed for AI workloads.

Infrastructure expansion

The company already operates data centres across several regions.

Its infrastructure footprint includes facilities in the UK, the US, Norway, Portugal, and Iceland.

These locations host high-performance computing environments built to handle the enormous processing requirements of artificial intelligence models.

Training and running modern AI systems requires large clusters of graphics processing units and specialised networking hardware.

By building integrated infrastructure, Nscale aims to simplify how organisations access and deploy computing resources needed for AI development.

The company said the fresh capital will support the expansion of its infrastructure platform across Europe, North America, and Asia as global demand for AI computing rises.

Tech partnerships

Alongside infrastructure development, Nscale has secured partnerships with major technology companies.

In October, the firm announced an expanded partnership with Microsoft that is expected to generate around $14 billion in business.

Earlier in the summer, Nscale also partnered with OpenAI to launch a Stargate branded AI data centre project in Norway.

The collaboration reflects growing demand for specialised infrastructure to support large scale AI development.

These agreements show how infrastructure providers are becoming central to the AI ecosystem as companies building models seek large computing environments.

IPO plans

Nscale is also exploring plans to go public as it expands its operations.

The company said in October that it is considering an initial public offering.

CEO and founder Josh Payne said the rapid growth of artificial intelligence is driving one of the largest infrastructure buildouts in human history.

Companies developing AI technologies require vast computing resources to train increasingly powerful models.

As spending on AI hardware, chips, and data centres accelerates globally, firms building the infrastructure behind those systems are drawing significant investor interest.

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US stock index futures dropped sharply on Monday as surging oil prices and escalating tensions in the Middle East heightened concerns about inflation and the risk of a broader economic slowdown.

Futures tied to the Dow Jones Industrial Average fell more than 523 points in early trading, while S&P 500 and Nasdaq 100 futures declined by more than 1% as investors reacted to a spike in energy prices and growing geopolitical uncertainty.

Oil prices surged above $100 per barrel as hostilities in the Middle East entered their tenth day, fueling fears that prolonged disruptions to global supply could push inflation higher and complicate monetary policy decisions.

Markets are also grappling with political developments in Iran after the country named Mojtaba Khamenei as the successor to Supreme Leader Ali Khamenei, a move widely interpreted as a signal that hardliners remain firmly in control in Tehran.

Oil surge rattles markets

Energy markets were at the center of the latest volatility.

Crude prices jumped more than 25%, briefly climbing toward $120 per barrel before easing slightly following reports that Group of Seven finance ministers and the International Energy Agency may consider a coordinated release of emergency oil reserves.

Saudi Aramco also offered prompt crude supply through a series of rare tenders, which helped trim some of the gains in oil prices.

The surge in crude prices comes after major Middle East producers cut output while the critical Strait of Hormuz remained effectively closed.

Kuwait announced production cuts, while Iraq’s output has reportedly dropped about 70%.

Even after retreating from intraday highs, oil prices remained significantly elevated.

West Texas Intermediate crude traded above $100 per barrel for the first time since 2022, while Brent crude also climbed sharply.

Analysts warned that the oil shock could have broader economic consequences if the conflict drags on.

Chris Beauchamp, chief market analyst at IG, said markets were still digesting the implications of rising energy prices.

“Stock markets have raced to catch up to all the news, but we are now looking at a vastly increased chance of a US and global recession as inflation surges,” he said.

Travel, banking stocks lead losses

The sharp rise in oil prices hit sectors sensitive to fuel costs particularly hard.

Airlines and travel companies were among the biggest losers in premarket trading.

Alaska Air and United Airlines fell about 3%, while cruise operators Carnival Corporation dropped 3% while Norwegian Cruise Line declined 4%.

Large US banks were also under pressure, with JPMorgan Chase, Citigroup and Bank of America each falling more than 2%.

By contrast, energy companies benefited from higher crude prices.

Shares of Diamondback Energy and APA Corp climbed more than 2%, while Occidental Petroleum gained about 2%.

Defense stocks also bucked the broader market decline, with RTX rising around 1%.

Inflation fears cloud Fed outlook

The spike in energy prices has complicated the Federal Reserve’s policy outlook at a time when the labor market has shown signs of weakening.

Last week’s economic data pointed to softer job growth even as broader economic activity remained strong, raising concerns about a potential stagflationary environment marked by slower growth and rising inflation.

Higher oil prices could make it more difficult for the Federal Reserve to cut interest rates as quickly as investors previously expected.

Treasury markets reflected those concerns, with the yield on the two-year Treasury note briefly touching its highest level since late November as traders reassessed interest rate expectations.

Expectations for a June rate cut had strengthened after a weak jobs report on Friday.

However, traders are now pushing those expectations further out, with markets pricing potential easing closer to September or October.

Market volatility has also increased sharply. The Cboe Volatility Index, often referred to as Wall Street’s “fear gauge,” surged above 30 and reached its highest level since April.

US equities had already endured a difficult week prior to Monday’s declines.

The Dow Jones Industrial Average fell nearly 1% last week, marking its steepest weekly drop since early April 2025.

The S&P 500 lost about 1.3%, while the Russell 2000 recorded its biggest weekly decline since early August.

Investors now face a crucial week of economic data, including job openings figures, the Federal Reserve’s preferred inflation gauge in the personal consumption expenditures report, and a revised estimate of quarterly GDP, all of which could influence the market’s outlook for growth and interest rates.

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The S&P 500 Index continued its strong downward trend last week, reaching its lowest level since December 17 last year. It ended the week at $6,740, down substantially from the year-to-date high of $7,000. Let’s explore some of the top catalysts for the SPY, IVV, and VOO ETFs this week.

US inflation report 

A key catalyst for the S&P 500 and its ETFs this week will be the upcoming US consumer inflation report on Wednesday.

This is a crucial report that forms the second part of the Federal Reserve’s dual role after the labor report. 

Data released on Friday showed that the economy shed over 92,000 jobs in February, that worst reading in years. The unemployment rate jumped to 4.4%, while wage growth remained steady.

Economists expect the upcoming US inflation report to show that the headline Consumer Price Index (CPI) rose to 2.5% in February, while the core CPI remained unchanged at 2.5%.

A higher inflation report than expected will make it hard for the Federal Reserve to cut interest rates as Donald Trump has suggested. The S&P 500 Index and other indices do well when the Fed is cutting interest rates.

US and Iran war 

The most important catalyst for the S&P 500 Index will be the ongoing war in Iran, which escalated during the weekend, with Israel bombing a key Iranian refinery. 

This war has led to a surge in energy prices in the United States and other countries. Brent, the global benchmark, has jumped from the year-to-date low of $55 to over $100. Similarly, the US oil benchmark has continued soaring aa traffic at the Strait of Hormuz fades.

The price of other energy products like natural gas and gasoline have continued rising this year, which will lead to a higher inflation rate in the US.

While energy companies in the S&P 500 Index are benefiting, other sectors, especially transportation and manufacturing, are all under substantial pressure as the war continues

Signs that the war is ending will be bullish for the S&P 500 and other US indices. A good example of this happened on Wednesday last week when the media reported that Iran had reached out to the United States for talks to end the war.

Top corporate earnings 

The other key catalyst for the S&P 500, SPY, IVV, and VOO ETFs is the upcoming corporate earnings in the United States. 

While the earnings season has largely ended, some important companies will release their numbers this week.

Hewlett-Packard Enterprise and Casey’s General Stores will release their numbers on Monday. Oracle, a top player in the AI industry, will release its results on Tuesday.

Adobe’s results on Thursday will be important as they will demonstrate whether artificial intelligence tools by companies like OpenAI and Anthropic are disrupting its business.

The other top corporate earnings to watch will be Dollar General, Ulta Beauty, Lennar Corporation, UiPath, and Campbell’s Soup.

S&P 500 Index rising wedge pattern 

The other key catalyst for the S&P 500 Index is its technicals, which point to further downside in the near term. 

As the chart above shows, the index has formed a rising wedge pattern, which is made up of two ascending and converging trendlines. It has already moved below the lower side of this pattern and the Strong, Pivot, and Reverse level of the Murrey Math Lines tool.

Therefore, the most likely scenario is where the index continues falling, potentially to the next key support level at $6,000.

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The global financial landscape has been fixated on the Iran war in recent days.

While the strikes that killed Tehran’s supreme leader and the nation’s subsequent “retaliation” were broadly expected to hurt stock prices, markets have actually shown a surprising level of resilience.

Despite this apparent stability, however, investors remain in a state of purgatory, waiting for a clear indication that the geopolitical risk has been fully digested.

And according to experts, there’s one specific technical milestone – a line in the sand that will signal the bulls have officially reclaimed control.

Why have US stocks remained resilient?

The aforementioned resilience stems from a market that’s arguably “under-owned” – characterized by a sentiment that Fundstrat technical strategist Mark Newton describes as “quite subdued despite the lack of capitulation.”

According to him, investor are looking past immediate kinetic conflict and looking into underlying economic fundamentals, which have remained sturdier than expected.

“To market’s credit, it’s been able to weather an amazing amount of bad news while not breaking down,” Newton wrote in a recent brief.

The market’s ability to absorb shocks, from energy price spikes to retaliatory strikes, without breaching its yearly lows suggests that the “wall of worry” is being climbed rather than hit.

Furthermore, domestic production in the US has acted as a buffer against the traditional “oil shock” narrative that typically accompanies Middle Eastern instability – enabling US stocks to “decouple” from the worst-case geopolitical scenarios.

What would be a clear buying signal for US stocks?

For the benchmark S&P 500 index to climb fully out of the woods, the specific signal traders must watch for is a decisive break above Monday’s intraday high of 6,901, according to Mark Newton.

On Wednesday, the index challenged this level with a high of 6,885.94 – but ultimately lacked the momentum to punch through.

If SPX can climb “above this past Monday’s highs, I think it’s right to think that lows are in place for the time being,” Newton wrote.

It’s a psychological barrier that proves buyers are willing to commit capital even amid a war. Until this “Monday ceiling” is shattered, the market remains in a state of suspended animation.

Newton further cautioned that the S&P 500 is currently “trapped in the tightest range ever experienced,” meaning the eventual breakout – whichever way it goes – is likely to be explosive.

What to expect from S&P 500 moving forward?

Newton further argued that this tight trading range will be “resolved sometime in March.”

For the average investor, the message is clear: the “Iran war discount” will only be fully removed once SPX proves it can trade at the price levels seen before the week’s most intense escalations.

Until 6,901 is in the rearview mirror, the market is merely treading water.

A successful breach of that level won’t just silence the skeptics but would confirm that, for Wall Street at least, the conflict has moved from a market-moving crisis to a background noise variable.

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